2014 make-or-break year for TPP: Singapore PM Lee Hsien Loong

KEN MORIYASU, Nikkei staff writer

Singaporean Prime Minister Lee Hsien Loong speaks during the International Conference on The Future of Asia in Tokyo on May 22.

TOKYO -- Countries in the Asia-Pacific region need to regard 2014 as the critical year for finalizing talks on the Trans-Pacific Partnership free trade agreement, said Singaporean Prime Minister Lee Hsien Loong in Tokyo on Thursday. Lee said Asia faces two future scenarios -- one good and one bad -- and that key factors in determining which path the region will follow include the U.S.-China relationship and the rise of nationalism.

Lee, in a keynote speech and during a Q&A session at the International Conference on The Future of Asia, organized by Nikkei Inc. and the Japan Center for Economic Research, expressed hope that TPP discussions will make significant progress this year.

"If we miss this year, the U.S. will have its midterm elections and no one will know what the U.S. Congress will look like after (that)," the leader said. "The U.S. will also have other preoccupations entering the next presidential election."

Lee urged Japan to overcome its reservations about the trade agreement and join it, pointing out that the benefits of the pact go beyond just trade and economic considerations. "TPP is the mechanism by which Asia-Pacific countries will come together to integrate with each other. Japan has to be part of this if it wants to have influence and contribute to the prosperity of the region."

Lee said the U.S., China and Japan will still be the three major players in Asia in 20 years. Though Lee said he was hopeful that ties within the region will improve, he also sees certain scenarios where things could take a turn for the worse.

The Singaporean leader said a "good scenario" will be one in which the U.S. continues to be a stabilizing force, China respects international norms and allows its neighbors the space to thrive, and Japan works with its neighbors to definitively put the history of the war behind it.

A "less benign scenario" will see the U.S. and China engage in a Cold War-style zero-sum game, nationalism will exacerbate historic grievances against neighbors, and efforts toward economic integration will stall.

Of the many "unknowns" that await Asia, Lee said the rise of China will be the biggest change that Asia will see in the next 20 years. "China has no road map. There is no precedent, in any other country, for the transformation which China will go through," he said. "The Chinese will have to feel their way forward carefully, like crossing a river one stone at a time."